Costs of purchasing fuel is a significant consideration for an owner of a vehicle and or a property. For example, large increases in gasoline prices have been shown to effect the frequency with which owners drive their cars, as well as effecting the type of cars that are purchased. As another example, home or building owners can switch between usage of hydroelectricity, natural gas or oil, depending on the relative prices of each fuel. Fuel prices are known to be subject to volatile pricing. Most fuels, including diesel, gasoline, hydrogen, ethanol, jet fuel, natural gas, and the like, have experienced periods of price volatility.
As fuel prices increase fuel producers and wholesalers typically benefit from greater profits, while fuel purchasers are disadvantaged by having to pay higher prices. Entities with large purchasing power and/or storage capacity may be able to “lock-in” a price for fuel or take delivery of a large quantity of fuel to protect against a rise in fuel costs. Typically, such entities will “lock-in” when the price of fuel drops and is expected to rise in the future. However, in the case of the average consumer purchasing from a retail outlet, even when fuel prices do dip and a future increase in prices is recognized or anticipated, there is little that the average consumer can do other than fill up the tank and hope that the prices stay low. The average consumer simply does not have a purchasing power or storage capacity to “lock-in” at a fixed price per unit quantity of a fuel. Therefore, the average consumer does not have an opportunity to manage the volatility of fuel prices so as to be protected from the disadvantages of rising fuel prices.
Several entities have attempted to provide a fuel price-protection service to the average consumer.
First Fuel Banks, is a family run operation in a small town called St. Cloud Minnesota. They have offered their customers a price protection facility since 1982 available at any of their 6 retail locations. Although they are small, over 5% of the population in their region has a First Fuel account. However, their customers can only withdraw at their own stations. The physical nature of their offering prevents them from further geographic expansion.
Gulf Oil operates roughly 1100 stations in the US NorthEast, mostly in Maine and New Hampshire. They announced sometime last year that they will offer a price protection program available only at their franchised locations, but the protection will only last for 12 months. They have yet to launch this concept which appears to be delayed for reasons that remain unclear.
A Fort Meyers company called “Fuel Bank”, may be launching a universal gasoline price-protection program in the fall of 2007 and have filed U.S. patent application Ser. No. 09/805,950 filed Mar. 15, 2001 (published as US2002/0029171) relating to this subject matter. However, their fuel credits will only last for 12 months and withdrawal will be extremely cumbersome. Customers will have to notify Fuel Bank via a web site with how much they want to withdraw and at which location they wish to pick it up. Then the customer will be mailed a voucher to be given to the station.
Several energy hedging companies exist that attempt to provide fuel solutions to mid-size fleets. The energy hedging company projects the fuel usage of the fleet over a specific time period. The fleet customer and the energy hedging company negotiate a flat-rate price for the projected fuel usage. Fuel is obtained at eligible pumps using a credit-card type payment system. At the end of the specified time period, the difference between projected fuel usage and actual fuel usage is determined, and the fleet customer is placed in either a credit or debit situation that must be resolved.
The above approaches suffer from a lack of flexibility and/or lack of convenience from the perspective of small to mid-size fuel consuming customers.
Therefore, there is still a need to develop a convenient fuel price protection system.